Google Cuts 12,000 Workers – 2023 Tech Layoffs Roundup

Key Takeaways

• Google has just announced they’ll be laying off 12,000 people in 2023
• Many other tech companies announced layoffs in 2022, and it looks like the trend is going to continue through 2023
• January has already seen the second highest number of layoffs in a month since Q3 2020, and there’s still 11 days left to go in the month
• Many tech companies in particular over hired during the pandemic lock downs, when online activity hit all time highs all around the world

According to layoffs.fyi, there have already been a total of 40,474 tech jobs cut in January 2023 from 151 different companies. Other than November 2022, which saw 52,135 workers downsized, that’s by far the largest monthly figure we’ve seen since the beginning of Q3 2020.

And this doesn’t include the 12,000 that Google has just announced today.

The list of downsizing companies includes many small startups who are feeling the pinch, but also a number of huge companies that very rarely send workers packing. Some of businesses with layoffs so far in 2023 include WeWork, Microsoft, Amazon, Stitch Fix, Salesforce, Vimeo, ByteDance, Teladoc Health, Riot Games, Hootsuite, Carvana, CoSchedule, Crypto.com, Coinbase, Thinkific, Citrix and of course, Twitter.

So yeh, quite a few.

Lets run through some of the biggest names on this list and look at what this trend might mean for tech going forward.

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Google to lay off 12,000 workers

Google CEO Sundar Pichai has sent out an email today announcing that they are due to immediately begin layoffs in the US. Cuts will also be made across various other countries, but these will take longer due to “local laws and practices.”

Laid off staff will receive 16 weeks severance and an additional two weeks of pay for each year they’ve worked at the company.

As has often been the case when layoffs have been announced, the Alphabet stock price jumped on the news, gaining 4%.

The announcement isn’t unexpected, as Google has recently made changes to their performance review process, making it easier for employees to fall into the underperforming category and harder to find their way into the top perfmcoring category.

Microsoft sacks 10,000 staff

On January 18th, Satya Nadella, the CEO of Microsoft, announced that the company will be downsizing its workforce by a total of 10,000 employees. With a global workforce of approximately 220,000, this amounts to a reduction of approximately 5% of its total staff.

Nadella attributed the workforce reduction to the changing economic environment, and stated, “we’re now seeing our customers optimize their digital spend to do more with less.” The company expects to incur a $1.2 billion expense for severance pay, lease consolidation, and adjustments to its hardware.

Next week, Microsoft will reveal its earnings report, however, the growth is predicted to be significantly lower compared to previous years. Some speculate that the 5% reduction in workforce may indicate potential for additional layoffs in the year 2023.

Salesforce cuts workforce by 10%

B2B software giant Salesforce announced its plans to reduce its workforce by 10%, equating to 8,000 employees, as well as reducing their office space footprint due to economic concerns.

The company’s co-CEO Marc Benioff, stated in a memo to employees that, “The environment remains challenging, and our customers are taking a more measured approach to their purchasing decisions.”

As is the case with other tech companies, Salesforce revenue increased dramatically during the pandemic, as more people worked from home and relied heavily on technology for remote work.

In the memo, Benioff mentioned the company may have hired too aggressively during that time. As of October, Salesforce employed almost 80,000 people, up from around 48,000 three years prior.

Amazon laying off 18,000 employees

Meanwhile On Wednesday, thousands of Amazon employees received an email from the company informing them that their positions had been “eliminated” with immediate effect.

This latest round of layoffs affected approximately 18,000 staff, as previously expanded from the 10,000 number announced by CEO Andy Jassy in November. Shortly after the emails were sent, access to work computers and offices for many of these employees were also revoked, according to Business Insider.

The emails from HR read, ‘Unfortunately, your role has been eliminated. You are no longer required to perform any work on Amazon’s behalf effective immediately.’

Stitch Fix replaces CEO and reduces workforce by 20%

Online personal styling service Stitch Fix is going through major upheaval, sacking its CEO and cutting headcount by 20%.

The announcement isn’t likely to come as a major surprise, given the company’s recent financial results. Last year they announced that they’d lost 200,000 active clients and suffered a net loss of $78 million. This was a significant increase from the $18.8 million loss suffered the year before.

Stitch Fix Founder and interim CEO stated in a blog post that “We will be losing many talented team members from across the company and I am truly sorry.”

Coinbase sends more workers out the door as crypto winter continues

The crypto sector has been one of the hardest hit in the recent volatility, with even the most supposedly blue chip companies struggling, or in the case of FTX, completely going under. Coinbase isn’t doing quite as badly as that, but they’re by no means immune.

CEO Brian Armstrong announced on the 10th January that they’d be laying off a further 950 employees, as part of a bid to cut operating expenses by 25%.

It’s not coming without costs though, as severance packages and related costs are expected to cost the company around $150 million.

The cuts come after Coinbase already laid off 18% of its workforce in June last year.

“Dark times also weed out bad companies, as we’re seeing right now. But those of us who believe in crypto will keep building great products and increasing economic freedom in the world. Better days are ahead, and when they arrive, we’ll be ready,’ Armstrong said in his statement.

Crypto.com layoffs

Last week another crypto heavyweight announced major cuts to their workforce, with Crypto.com releasing details of a 20% reduction in headcount.

Co-founder and chief executive Kris Marszalek posted on the company’s blog, stating that “We grew ambitiously at the start of 2022, building on our incredible momentum and aligning with the trajectory of the broader industry. That trajectory changed rapidly with a confluence of negative economic developments.”

This brings the total number of employees at the crypto exchange down to around 4,000 and is the second round of cuts they’ve implemented. In June last year they announced a reduction in staffing of around 260, and another 2,000 between July and October.

Companies like Coinbase and Crypto.com rely heavily on trading volume to generate revenue. With volumes down significantly as crashing prices have scared investors and traders away, the bottom line for many exchanges has taken a massive hit.

What do all these layoffs mean for investors?

There’s no denying that it’s been a tough time for the tech industry. In the short term, that’s not likely to change much. With that said, layoffs aren’t necessarily bad news when you take a long term view.

On the contrary, many of the companies listed in this article saw their stock price rise on the announcement of layoffs. For shareholders, it often means that a company is trimming the fat and focusing more on profitability.

This can mean cutting business units that aren’t delivering and focusing spend on the marketing areas that are providing the best ROI.

Even so, it’s hard to know which companies are going to emerge the strongest from the current volatility.

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